We have the blueprint for turning social progress into economic value, now let’s take action

This year, global public development aid is set to shrink dramatically by an estimated 30% or $74 billion, reflecting a shift in budget priorities across governments. A new report from the Schwab Foundation for Social Entrepreneurship warns that this decline could jeopardize progress on global challenges and makes a case for engaging private sector investment in new and compelling ways.

The report, Redefining Value: From Outcome-Based Funding to Tradeable Impact, builds on the concept of outcome-based funding and outlines a visionary, yet practical, approach: treating positive social and environmental results as real assets that can be measured, verified and rewarded financially. The report calls for building systems that create incentives to fund and scale these outcomes, focusing especially on the communities they aim to benefit.

One of the scenarios in the report introduces the idea of a new type of currency: impact credits. These would work similarly to carbon credits, but instead of pricing pollution, they reward actions that generate a public good, such as improving education, reducing emissions or supporting vulnerable groups. These credits could be traded on open markets, creating a clear business case for social and environmental progress.

This is not just theoretical. South Korea’s Social Progress Credit (SPC) programme has already proven the concept. Launched in 2015 by SK Group in collaboration with the Center for Social Value Enhancement Studies (CSES), the SPC programme has mobilized more than $360 million in verified social value and disbursed $52 million in rewards to over 400 social enterprises over the past decade.

South Korea’s experience shows the power of linking financial incentives to measurable outcomes. Participating enterprises have improved their credibility, refined their business models and accessed new capital. Outcome-based incentives have proven effective in improving performance and in building public trust.

Similarly, Zlto, a South African digital rewards platform developed by RLabs, enables over 500,000 young people to earn digital currency for engaging in community work, training and micro-tasks. These earnings can be redeemed for essentials at over 3,000 partner retailers. They also let earners build a verified digital CV via blockchain, which can enhance their employability. Zlto has processed over 3 million transactions and has expanded to other countries, including the UK, Tanzania and Nigeria.

In the environmental space, Toco is a digital currency that transforms everyday transactions into climate action. Each Toco represents one tonne of CO₂ either removed from or avoided in the atmosphere. It's backed by verified carbon mitigation assets held by the Swiss-based Carbon Reserve Foundation. Through a secure mobile app, users can buy, spend or retire Tocos while tracking their individual impact. The platform also fosters community engagement via its custodian programme, which educates and rewards volunteers for spreading awareness and driving real climate benefits.

New platforms, such as Common Good Marketplace and OutcomesX, are also emerging as digital marketplaces where verified outcomes can already be traded, allowing companies, donors and governments to support community impact in transparent and scalable ways.

The report also provides a roadmap for scaling such models responsibly, highlighting six key enablers:

• Shared frameworks for defining and assessing impact.

• Methods for assigning value and enabling trading.

• Digital infrastructure, like registries and exchanges.

• Trusted systems for verification and assurance.

• Financial and regulatory incentives to stimulate demand.

• Governance frameworks that prioritize transparency, legitimacy and equity.

Still, we caution that impact assets must be carefully designed. Without strong verification and inclusive governance, they risk becoming symbolic or reinforcing inequalities, rather than driving real change.

Existing policy tools have helped us make significant progress, but today’s challenges require bold new thinking. Impact credits may sound like social fiction, but the infrastructure is already being built. We must ensure that communities and social innovators are at the centre of these developments, so that financial innovation helps shape a more inclusive, resilient and regenerative global economy.